Evidently, Mr. Bernanke (Chairman of the Federal Reserve System) is not trying to buy a house himself.  I know this with great certainty.  Otherwise, he would not be proposing his latest idea of the ‘economic twist’.
Sure. He is doing everything he can to stimulate the US economy.  He is using economic incentives to motivate consumers to go spend money.
His latest efforts, QE1 and QE2 (that’s quantitative easing #1 and #2), didn’t get the results he wanted.
So, now it is the ‘economic twist’ … selling short-term T-bills while simultaneously buying long-term T-bills.  Economists are quickly offering their opinions both pro can con.  The idea is to keep interest rates down by “twisting” the economic linkage between long-term and short-term interest rates.
But Mr. Bernanke is missing the point when it comes to real estate.
For, you see, interests rates come in fourth place when it comes to buying homes, trailing behind jobs, consumer confidence, and lending standards.
JOBS
How much time does someone need to spend in college to know this truth?  The answer is ZERO days.  Here’s the question … If you don’t have a job, are you going to be spending your time touring homes?  So, higher joblessness (like, say 9%) simply translates into diminished demand for houses.  Not good for buyers and therefore not good for sellers.
CONSUMER CONFIDENCE
So, another common sense question … When a person is worried about not having their job some time in the near future, or having their hours cut back, they aren’t going to be out putting in offers to buy their next house. 
Consumer confidence actually has its own index named (duh!) the Consumer Confidence Index.  It is a measurement determined by a broad monthly survey of about 5,000 people.  The survey asks (think a strong Philly accent here)  “How you doin’?  Well, lately a lot of people have said “not great” As a matter of fact the Index stands at 44.5 for August 2011 (1985=100), down from 59.2 in July.  That’s a really low index …. meaning no confidence.
That means the consuming public is pretty uncomfortable about buying a house.  You are not going to hear: “Gee, honey, let’s go buy a house today!”
LENDING GUIDELINES
During the “crazy kool-aide” time, lenders would provide cash to buy a home based on just about one criterion.  Basically, if a person could fog a mirror, they could borrow money.
Not today!  A person actually has to have a real job and cash saved for a down payment, and no significant blemishes on their recent credit history.
So, while a person might have a job and available cash, their credit score might have taken a hit due to the Great Recession.  No money for them given today’s lending guidelines.
INTEREST RATES
While interest rates are important and while they serve as an important ingredient in monetary policy, they come in dead last when it comes to buying a house. 
And while interest rates remain at historic lows, they can’t lift all the downward pressure from the other three factors.  Bummer!
CONCLUSION
I applaud the efforts being made by Mr. Bernanke’s and all of the ivory-tower economists.  Yet, the real world needs jobs.
The politicians are sallying forth with their own agendas proving each other to be wrong.
Everybody knows the answer … we need to create jobs.  But nobody knows how to make that happen.  Sorry.  I don’t have the magic bullet for job creation either.  But, that is the giant problem to be solved.  “Twisting” economic mathematics doesn’t create jobs.
Besides, the hypothesis for this blog is about Mr. Bernanke buying a home.  He does not need a job … he’s got one.